NJ Ruling Does Not Bode Well For 'Stranger' Life Policies
Law360 (September 6, 2019, 3:47 PM EDT) -- On June 4, the New Jersey Supreme Court issued a decision in Sun Life Assurance Co. of Canada v. Wells Fargo Bank NA — closely watched by the life insurance and life settlement industries — ruling that stranger-originated life insurance transactions are void ab initio human life wagers. The unanimous court ruled that STOLI transactions run afoul of New Jersey’s insurable interest statute — and violate New Jersey’s Constitution, anti-gambling statutes and public policy against wagering.
The court distinguished illegal STOLI from legal life settlements, where an insured (or someone with an insurable interest in the insured’s life) purchases a policy...
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